A recent case has highlighted the need for parties in negotiation with regard to an agreement to get the terms of that agreement clearly set out at the beginning of the transaction.
Deputy Judge Daniel Alexander accused two companies involved in a dispute over a property development of being more concerned about the fine wine they were drinking that the terms of the deal itself.
“The correspondence is more precise about the provenance and vintage of claret to be enjoyed while considering the terms of one of the proposals than about the terms themselves.”
The parties to the case, Sunley Holdings and London and Medway, had an informal discussion via email in 2008 with regard to a plot of land in Fulham Palace Road in London. London and Medway brought the development opportunity of the land to Sunley Holdings and there was an agreement that in return for this Sunley would pay them a 20% share of the profits.
However, relations between the parties broke down and in an email in 2009 London and Medway terminated the agreement saying that they had “had enough” of working with Sunley Holdings. When the development completed London and Medway then tried to claim 20% of the profits based on the 2008 agreement. The judge ruled that London and Medway had relinquished their rights in another email in 2012 in which a director of the company stated that they would “walk away from any profit share in FPR”.
London and Medway have said that they will be appealing the decision.
Keep up to date with our daily blogs through the Edward Hands & Lewis mobile app, just search Edward Hands on the iPhone or Android store to download our app for free.